Selecting U.S. Representative Tom Price (R-Ga.) — author of legislation to repeal the Affordable Care Act — as his nominee for Health and Human Services Secretary further confirms President-elect Donald Trump’s intention to construct a new version of health reform, advisers and industry reps say. However, although encouraged by his experience as a doctor, the industry is wary of how Price will handle the taxation of health benefits as he structures an ACA replacement plan.
What follows is reaction from employee-benefits industry leaders to Trump's pick.
“President-Elect Trump’s pick of Dr. Tom Price to lead HHS sends a very clear message to the country: The time has come for the ‘rule-makers’ to step aside in favor of the American healthcare consumer,” says Mark Gaunya, co-owner and chief innovation officer at Borislow Insurance in Methuen, Mass.
Mitchell Andrews, partner at The Plexus Groupe in Deer Park, Ill., appreciates Price’s medical background. “[H]e understands our national dilemma as a physician, as a business man and someone who has looked to reduce the cost of delivering healthcare,” says Andrews. “We, [the industry] look forward to working with Rep. Price on reducing the cost of healthcare so we can deliver more affordable/quality coverage to our clients, and all Americans."
Also see: “Trump announces Price for HHS chief.”
Having “developed a strong working relationship” with Price during his years as a member of Congress, National Association of Insurance & Financial Advisors’ President Paul Dougherty says, “His work on the Ways & Means health subcommittee, his medical background, and his appreciation for the role of the agent in providing professional assistance to consumers certainly qualify him for the position of HHS Secretary. NAIFA hopes he is confirmed quickly and looks forward to working with him as HHS Secretary.”
As a surgeon, Price “will give a unique perspective and approach to the healthcare transition,” adds Jennifer Lovett, president and CEO of Crystal Financial Insurance Services in South Windsor, Conn. “Providers witnessed many of the same shortfalls of the Obamacare system that we brokers experienced: A dysfunctional system that left clients with unpaid and denied claims, unexplained cancellations, and compensation issues for both the providers and brokers. I believe if he has the right team of professionals from the insurance, medical, and legal fields it will create the continuity needed for a successful healthcare system.”
Joel Wood, SVP of government affairs at the Council of Insurance Agents & Brokers, calls Price “an outstanding choice” for HHS Secretary. “He entered politics because he was frustrated with the ever-increasing imposition of government between patients and physicians,” says Wood. “Along with Speaker Ryan, he has been the most articulate spokesman in the U.S. House not only in opposition to most aspects of the ACA, but he’s been equally forceful in advancing patient-centered alternatives to Obamacare.”
Strong advocate against ACA
Concerned about stemming the cost of healthcare, Ed Oleksiak, senior vice president, employee benefits and shareholder at Holmes Murphy in Dallas, is confident Price’s appointment will instigate change, “the question is whether it will be enough to make a difference,” he says.
Gaunya looks to the ACA repeal legislation Price proposed as a member of Congress — Empowering Patients First Act — as a framework for how he’s likely to proceed in his role at HHS. “Dr. Price believes it’s important that Washington not be in charge of healthcare and I couldn’t agree more,” says Gaunya. “The plan is based on six principles: affordability, accessibility, quality, responsiveness, innovation and choice.”
There is a mandate to “make major changes” to health reform, says CIAB’s Wood, who sees the moving pieces of health policy reform coming together in the coming months. “[W]ith the elevation of Congressman Price, the contours of a repeal-and-replace plan are becoming more evident,” he says. “They’ll be based on tax credits, expansion of health savings accounts, a shift to the states, and medical malpractice reform.”
Adds Holmes Murphy’s Oleksiak, “It’s crucial that any replacement legislation includes consumer involvement tools, such as price and quality transparency, wellness incentives, and balance billing protections. I also hope that Rep. Price appreciates the large role brokers and consultants play in helping both individuals and groups navigate the healthcare system and make critical healthcare decisions.”
In developing new legislation, Wood notes that Trump has made clear he accepts two market reforms brought on by the ACA: allowing children up to age 26 to remain on their parents’ health plans and removing pre-existing condition restrictions. “The latter goal will be tricky, as we’ve already seen plenty of adverse selection in the state and federal exchanges,” he says. “The emerging concept of ‘continuous coverage’ with multiple ratings bands seems to be the work-around on this issue, but, again, it’s too early to say. But it’s not too early to say that HHS Secretary Tom Price will be an exemplary leader.”
Concerns about tax provision
However, industry representatives have mixed feelings about suggestions from Price that he would consider capping the employer tax exclusion for health plans to balance the books.
“This tax increase on employer-provided insurance will help provide tax equity to individual purchasers and could possibly bring in additional tax revenue to slow down our ever-increasing national debt,” says Oleksiak. “However, it’s critical and I hope that Rep. Price and his team recognize the value of employer-provided health insurance to the more than 155 million individuals who currently have it.”
Lockton is “very much opposed” to treating employer-sponsored health insurance as a taxable fringe benefit. “It’s like imposing the ACA’s Cadillac tax on individuals,” says Ed Fensholt, senior vice president and director of compliance services. “In addition, he’s advocated supplying age-banded tax credits people can use to buy individual health insurance. He wanted to make these credits available even to those who are offered decent employment-based coverage. We’re concerned about the impact on employer group plans if the youngest, healthiest lives can take a tax credit and bail to the individual market and buy cheap plans. It risks leaving many of these individuals underinsured, and leaving the worst risks in the group plan, creating an adverse cost spiral.”
Nancy Mellard, executive vice president and general counsel for CBIZ Employee Services, is also skeptical about how employer-sponsored health benefits will be treated.
“If we look at the repeal of the Affordable Care Act and what portions of that are very favorable, such as dependent coverage to age 26 and no pre-existing conditions … somebody has to pay for those,” Mellard says. “If we are looking at repealing the Affordable Care Act, and potentially not delaying the Cadillac tax but instead repeal that as well, we have to determine how we are going to pay for this. One way could be by limiting the exclusion of employer benefits to a certain amount. I am concerned about that because I think employee benefits, sponsored by the employer, is sacred and that is all I have ever known since I started in this business.”
Additional reporting by Phil Albinus, Brian M. Kalish and Cort Olsen.
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